Last week’s annual Davos meeting of the World Economic Forum was conspicuous by how little it seemed to matter to anyone — the event passed with hardly a nod from the mainstream media, which had more important things to worry about. But as I wrote on TIME.com, it wasn’t simply that Davos was eclipsed in the news cycle by global stock market wobbles and by Hamas in Gaza wiping the floor with its dunderheaded adversaries (dutifully gathered at Davos, in the persons of Condi Rice, Tony Blair, the Israeli government and the leaders of Fatah). On fronts as different as financial markets and the geopolitics of the Middle East, it has become plain that the political and economic elites of the West have seen a sharp decline in their ability to dictate events.

The decline of Davos Man is not simply related to a credit crunch or a U.S. election year. Even if America elects a new Administration dedicated to reversing the mistakes of the Bush team, it is unlikely to restore U.S. and Western primacy such as it existed in the golden years of Davos. The policy failures of the Bush years may have accelerated the decline of U.S. influence, but they are not its sole cause. In the years during which the U.S. became distracted by the “global war on terror,” China’s economy has grown to twice the size it was when President Bush first took office. It is to China — guarantor, by virtue of the trillion dollars and growing line of credit it makes available to the American consumer, of the American way of life — that U.S. investment banks turn for help when confronted by their losses in the subprime loan crisis. The very success of capitalism in developing and former socialist countries has inevitably weakened the grip of the West on the global political economy.

Today, market analysts contemplate whether the best hope for the global economy avoiding being dragged into the vortex of recession by the U.S . slowdown may be the “decoupling” from the U.S. economy that some believe could allow economies such as China and India to continue growing by virtue of momentum in their own economies. It’s a theory, untested in crisis — and clearly the wobbles hitting India’s stock market this week suggest its own investors are not convinced. Still, China has already become the key trading and investment partner in both Africa and in some key Latin American countries, offering a model of development quite different from the “Washington consensus” on issues of governance and economic management that might, as easily, have been dubbed the “Davos consensus.” China is certainly not going to take direction from its debtors, and global energy prices have transformed Russia from obedient supplicant to swaggering challenger to the West.

The U.S. and its allies remain immensely powerful, but the limits of their ability to influence events have been laid bare in Iraq. Today, long-term traditional U.S. allies in Asia, Africa, Latin America, the Middle East and Europe can no longer be counted on to follow Washington’s lead. At the same time, the Davos crowd has lost its near-monopoly on global political and economic power, which is increasingly being diffused across a variety of different power centers with shifting alliances. French foreign policy intellectuals of the 1990s, fearful of what they called the American “hyperpower,” fantasized about a “multipolar world” where power was balanced across a variety of different power centers and interests. While economic “decoupling” remains an untested hypothesis, geopolitical “multipolarity” is today increasingly plain to see.

But a far more extensive and interesting development of this argument can be found in Parag Khanna’s must-read New York Times magazine piece, Waving Goodbye to Hegemony.
Khanna begins with the present distribution of power, noting that the
presidential candidate in the U.S. sound almost quaint as they discuss
their plans for managing the world. “At best, America’s unipolar moment
lasted through the 1990s, but that was also a decade adrift,” he
writes. “The post-cold-war ‘peace dividend’ was never converted into a
global liberal order under American leadership. So now, rather than
bestriding the globe, we are competing — and losing — in a geopolitical
marketplace alongside the world’s other superpowers: the European Union
and China. This is geopolitics in the 21st century: the new Big Three.
Not Russia, an increasingly depopulated expanse run by Gazprom.gov; not
an incoherent Islam embroiled in internal wars; and not India, lagging
decades behind China in both development and strategic appetite. The
Big Three make the rules — their own rules — without any one of them
dominating. And the others are left to choose their suitors in this
post-American world.”

He has interesting thoughts on why Russia
won’t make it as a major power in its own right, and will be forced to
align either with Europe or with China. (It’s population continues to
rapidly diminish.) He makes the case that the geopolitics of the next
century will be contested by three main hemispheric power blocs led by
the U.S., Europe and China, and that the outcome of their battles will
be determined largely by the choices of what he calls “second world
swing states” — countries with substantial economic or political
weight, such as Turkey, Iran and Brazil, with no fixed allegiance to
any of the Big Three.

The key second-world countries in Eastern Europe, Central Asia, South
America, the Middle East and Southeast Asia are more than just
“emerging markets.” If you include China, they hold a majority of the
world’s foreign-exchange reserves and savings, and their spending power
is making them the global economy’s most important new consumer markets
and thus engines of global growth — not replacing the United States but
not dependent on it either. I.P.O.’s from the so-called BRIC countries
(Brazil, Russia, India, China) alone accounted for 39 percent of the
volume raised globally in 2007, just one indicator of second-world
countries’ rising importance in corporate finance — even after you
subtract China. When Tata of India is vying to buy Jaguar, you know the
landscape of power has changed. Second-world countries are also fast
becoming hubs for oil and timber, manufacturing and services, airlines
and infrastructure — all this in a geopolitical marketplace that puts
their loyalty up for grabs to any of the Big Three, and increasingly to
all of them at the same time. Second-world states won’t be subdued: in
the age of network power, they won’t settle for being mere export
markets. Rather, they are the places where the Big Three must invest
heavily and to which they must relocate productive assets to maintain
influence….

Second-world countries are distinguished from the third world by their
potential: the likelihood that they will capitalize on a valuable
commodity, a charismatic leader or a generous patron. Each and every
second-world country matters in its own right, for its economic,
strategic or diplomatic weight, and its decision to tilt toward the
United States, the E.U. or China has a strong influence on what others
in its region decide to do. Will an American nuclear deal with India
push Pakistan even deeper into military dependence on China? Will the
next set of Arab monarchs lean East or West? The second world will
shape the world’s balance of power as much as the superpowers
themselves will.

The starting point of a new American leadership looking to remain
competitive in the new geopolitics (the idea of restoring American
primacy is already an anachronism, he argues), will be to pursue what
President Bush promised during his first presidential campaign — a
humble foreign policy. One based on a consultative and cooperative
relationship with new and emerging power centers of a sort quite
unimaginable to those currently in charge. It may be a sign of Davos’s
own decline as a showcase of global influence that the conference was
opened by Condi Rice and chaired in many key sessions by Tony Blair.
Why would you want to listen to the unrepentant cranks who screwed
things up over the past decade when trying to figure out how to manage
the next one?

Tony Karon is a journalist from Cape Town, South Africa and resident of
New York since 1993. He is currently a senior editor at TIME.com
(although his writings at Atlantic Free Press and personal blog
he does on his own time and is personally entirely responsible for its
content, which in no way reflects the views or outlook of anyone else).

Karon has worked for Time since 1997, covering the Middle East, the
“war on terror” and international issues ranging from China’s emergence
to the Balkans. He also does occasional op-eds for Haaretz and other
publications, as well as bits of TV and radio punditry for CNN, MSNBC,
and various NPR shows. Karon did an ever-so-brief stint at Fox News
(measured in months!) and worked at George magazine in its startup
year. Having majored in economic history, he cut his analytical teeth
in South Africa in the struggle years, where he worked both as an
editor in the “alternative” press and as an activist of the banned ANC.
And in that context, his obsession with understanding global events
took root, as a means of contextualizing the choices and obstacles
faced in the struggle against apartheid.

In 1990/1, he gave up his activist career almost as soon as Nelson
Mandela was released, the ANC was unbanned and the regime conceded to a
transition to democracy — and a “normality” was achieved in South
Africa politics. Karon then went to work in the mainstream media at the
Cape Times and the Mail & Guardian Weekly, before leaving for New
York in 1993 on what he imagined would be an extended holiday.

A brief research gig at Time Out opened his eyes to the possibilities
of working in the U.S. — as well as hooking up to the first connections
of the sort of ever-expanding networks that make life in the city
possible. What followed was a mad array of freelance gigs ranging from
the sublime (television work for Britain’s Channel 4 that involved
escapades such as spending three days with the rapper Notorious B.I.G.)
to the ridiculous — writing the script for a Geffen Records
“rockumentary” on Manowar,
an upstate New York heavy metal band, really big in Spain and Greece,
whose brief spell in the Guiness Book of records as the world’s loudest
band underscored their image of themselves as Norse warriors and
Wagner’s true inheritors.

In the aftermath of 9/11, he found many friends and acquaintances
asking me to share private observations about the “war on terror” and
related subjects and started mailing those out to a list of friends and
colleagues, that just kept growing as they forwarded them to others.
And finally, after a substantial hiatus, they’ve evolved into Rootless Cosmopolitian - where he blogs regularly.

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